From the era of your and our forefathers, wholesalers have played an important role in the distribution channel of the country. A few decades back, these sales centered entities were one of the key drivers of the economy. However, today they are struggling to maintain their position and proportion in the market to draw sustainable profits.
Most of the traditional wholesalers are stuck between the manufacturers who are increasing the prices of the commodities (increasing prices due to the increase in the cost of manufacturing) and retailers who constantly demand lower prices and better service.
Challenges faced by the wholesale distribution system/sector in India:
The wholesale industry is stuck in the Bermuda Triangle of significant investment, costs that continue to escalate and faster fulfilment of orders with the best-in-class services.
Challenge 1: Disintermediation
With the coming of technology and better synchronization of the market, the ‘middleman position’ of the wholesaler is threatened. Retailers are slowing building wholesale marketplaces online to deal directly with manufacturers, cutting wholesalers out entirely.
Challenge 2: Inventory Issues
Constantly evolving and changing demands of the consumers has made it difficult for the wholesalers to manage the stock/inventory. Though some of the businesses do have RFID tags, these can be extremely expensive.
Challenge 3: Increasing Competition from the Manufactures
The increasingly efficient logistics systems are broadening the scope for manufacturers to reach the retail markets easily omitting the role of the wholesaler. Nowadays, large manufacturers also possess large distribution networks, shrinking the size of the market available at the disposal of the wholesaler.
Challenge 4: Increasing Fuel Price
Wholesaling is a business of transporting products from manufacturers to retailers, and fuel prices play a crucial role in deciding the company’s overall profitability. The increasing prices of fuel pose a challenge for the wholesalers to have sustainable profits.
Challenge 5: The Modern Wholesalers:
As big-box retailers such as Walmart expand their product offerings and services, they are tightening the delivery deadlines for the distributors (to deliver large quantities of goods) and even replacing them (by directly dealing with the manufacturer), which is causing a two-way brunt to the wholesaler.
We at LiveSauda believe in talking about the solution for every problem statement. Being associated with the wholesale Industry, we understand its problem statements and solution sets. Here are a few solutions to help all those who are sinking in the puddle of uncalled changes in the Indian market system.
Solutions:
(Automation of the Wholesale Market)
- Make the technology investments that are necessary to keep up with the modern day challenges.
- Create solutions to have sustainable competitive advantages. Do not just play on the price points.
- Rapidly and effectively adapt to the market situation and opt for omnichannel marketing, Digital Tenders and Online Bids to pacify the ever-growing market demands.
- Make necessary operational investments to reduce time to market for new offerings and improve overall customer service.
Stay tuned with us for more such informative pieces and for knowing more about the Digital Tenders and Online Bids. Until then, upgrade and digitalize your business!
